Canadian monthly GDP is the highlight in the upcoming week. Here’s an outlook for the Canadian events and an updated technical analysis for USD/CAD.
USD/CAD daily chart with support and resistance lines on it. Click to enlarge:
Canadian CPI came out as expected, and this wasn’t loonie-positive. There’s no rush for speedy tightening cycle by the central bank.
- RMPI: Published on Tuesday at 12:30 GMT. The Raw Materials Price Index made a leap in last month’s release – 1.7%, stronger than expected. The Canadian dollar isn’t expected to enjoy this indicator now, as the figure relates to May, a bad month in the global markets.
- GDP: Published on Wednesday at 12:30 GMT. The Canadian economy grew by 0.6% in March, better than expected. This concluded a great first quarter with an annual growth rate of 6.1%, double the American growth rate. A similar growth rate is expected in April, the first month of Q2.
USD/CAD Technical Analysis
After making a small dip under 1.02 the pair ascended and struggled with 1.03 (a new line that didn’t appear in last week’s outlook) and eventually rose above temporarily above 1.04 before closing at 1.0350.
Looking up, 1.04, that was the boundary of the 1.04 to 1.0750 range is still a minor line of resistance. Above we get resistance at 1.0560 that was a pivotal line in recent weeks.
Higher, 1.0750 worked as a resistance line during May and also in 2009. It’s followed by 1.0850, which was similarly a line of resistance about a year ago and also a month ago. Even higher, 1.1130 remains a distant line.
Looking down, 1.03 provides immediate support, and it’s followed by 1.02 – the 2009 low which also played a role in capping the pair after it reached parity. USD/CAD parity is the ultimate support line.
A break below parity, which isn’t likely in the upcoming week, will send the pair towards 0.98 and then 0.97.
I remain bearish on USD/CAD.
The Canadian economy is doing great, better than the American one. This week’s GDP release should provide a fresh boost.
Further reading:
- For a broad view of all the week’s major events worldwide, read the forex weekly outlook.
- For EUR/USD, check out the Euro/Dollar Forecast.
- For GBP/USD (cable), look into the British Pound forecast.
- For the Australian dollar (Aussie), check out the AUD/USD forecast.
- For the New Zealand dollar (kiwi), read the NZD/USD forecast.
- For USD/CAD (loonie), check out the Canadian dollar forecast.
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